Anixter International Inc. (AXE, Financial) filed Quarterly Report for the period ended 2010-10-01.
Anixter International Inc. has a market cap of $1.89 billion; its shares were traded at around $57.7 with a P/E ratio of 20.2 and P/S ratio of 0.4. Anixter International Inc. had an annual average earning growth of 13.2% over the past 10 years.AXE is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, David Dreman of Dreman Value Management, Kenneth Fisher of Fisher Asset Management, LLC, Ron Baron of Baron Funds, Chuck Royce of Royce& Associates, Mario Gabelli of GAMCO Investors, Steven Cohen of SAC Capital Advisors.
As of October 1, 2010 and January 1, 2010, the Companys short-term debt outstanding was $76.9 million and $8.7 million, respectively, and the Companys long-term debt outstanding was $650.7 million and $821.4 million, respectively. Primarily as a result of the lower debt levels, the Companys interest expense has declined in the third quarter and first nine months of 2010 as compared to the corresponding period in the prior year by $4.9 million and $7.9 million, respectively. The 6.1% average cost of debt in the third quarter was down from the 7.7% level of the third quarter of 2009 due to the previously mentioned debt repurchases. At the end of the current quarter, approximately 86.2% of our outstanding debt had fixed interest rates, either by the terms of the debt or through hedging contracts, and the Companys debt-to-total capital ratio was 42.9%. Over time, the Company expects to return to its targeted range of 45% to 50%.
Net Income: For the third quarter of 2010, the Company reported net income of $36.5 million, or $1.03 per diluted share, compared to $22.1 million, or $0.61 per diluted share, reported in the year ago period. Excluding the current periods net loss on the repurchase of debt of $1.7 million ($0.05 per diluted share), net income would have been $38.2 million, or $1.08 per diluted share. This compares favorably to a third quarter of 2009 net income of $21.4 million, or $0.59 per diluted share, adjusted for a net gain of $0.7 million ($0.02 per diluted share) on the repurchase of debt.
Net Sales: When compared to the third quarter of 2009, North America net sales in the third quarter of 2010 increased 9.3% to $1,007.0 million from $921.5 million. Excluding favorable effects of foreign exchange rate changes and copper prices of $7.6 million and $13.1 million, respectively, North America net sales were $986.3 million in the third quarter of 2010, which represents an increase of $64.8 million, or approximately 7.0%, as compared to the year ago quarter. Excluding the sales related to the Companys decision to exit a customer contract, which contributed $29.8 million of sales in the third quarter of 2009, third quarter sales would have been $94.6 million favorable to the year ago quarter, representing organic growth of 10.6%.
Net Sales: When compared to the third quarter of 2009, Europe net sales increased 12.4% to $247.2 million in the third quarter of 2010, including $2.5 million due to higher copper prices. Unfavorable foreign exchange rates decreased net sales by $14.9 million in the third quarter of 2010. Excluding copper price effects and the unfavorable effects of foreign exchange rate changes, Europe net sales were $259.6 million in the third quarter of 2010, which represents an organic increase of $39.8 million, or approximately 18.0%, over the third quarter of 2009. Excluding the sales related to the Companys decision to exit a customer contract which contributed $0.9 million of sales in the third quarter of 2009, third quarter sales would have been $40.7 million favorable to the prior year quarter, representing organic growth of 18.5%. This growth is driven by higher sales in the OEM Supply end market due to the increased manufacturing production in most vertical markets, together with solid growth in the Enterprise Cabling and Security end market.
Operating Expenses: Excluding the goodwill impairment of $100.0 million from the prior year, the Company reported a year-on-year increase in operating expenses of 3.1% from $701.4 million in the year ago period to $722.8 million in the nine months ended October 1, 2010. The prior year results also include a severance charge of $5.7 million. Excluding the severance charge and $7.4 million of unfavorable foreign currency effects in the first nine months of 2010, operating expenses increased by 2.8% to $19.7 million as compared to a 7.2% increase in organic sales (excluding the terminated customer contract). Operating expenses in the first nine months of 2010 reflect higher variable compensation related costs and variable costs associated with the increase in organic sales. However, these increases have been partially offset by the cost reduction initiatives the Company implemented last year.
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Anixter International Inc. has a market cap of $1.89 billion; its shares were traded at around $57.7 with a P/E ratio of 20.2 and P/S ratio of 0.4. Anixter International Inc. had an annual average earning growth of 13.2% over the past 10 years.AXE is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, David Dreman of Dreman Value Management, Kenneth Fisher of Fisher Asset Management, LLC, Ron Baron of Baron Funds, Chuck Royce of Royce& Associates, Mario Gabelli of GAMCO Investors, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
Net cash used for financing activities was $195.4 million in the nine months ended October 1, 2010 compared to $273.5 million in the corresponding period in 2009. Using net cash generated from operations, short term borrowings under the accounts receivable securitization facility and net proceeds from other borrowings, during the nine months ended October 1, 2010, the Company repurchased 1.0 million shares of common stock for $41.2 million and retired a portion of its Notes due 2033 and Notes due 2014 for a total of $220.1 million. The retirement of debt resulted in the recognition of a pre-tax loss of $32.4 million in the nine months ended October 1, 2010. In the corresponding period of the prior year, the Company received net proceeds of $180.4 million from the issuance of the Notes due 2014 (net of deferred financing costs of $4.8 million associated with the offering). Using the proceeds from the issuance of the Notes due 2014 and a portion of the $393.6 million of cash generated from operations during the first nine months of 2009, the Company reduced borrowings by $399.0 million (primarily short term borrowings), repurchased 1.0 million shares of common stock for $34.9 million and retired of portion of its Notes due 2033 for $19.0 million.As of October 1, 2010 and January 1, 2010, the Companys short-term debt outstanding was $76.9 million and $8.7 million, respectively, and the Companys long-term debt outstanding was $650.7 million and $821.4 million, respectively. Primarily as a result of the lower debt levels, the Companys interest expense has declined in the third quarter and first nine months of 2010 as compared to the corresponding period in the prior year by $4.9 million and $7.9 million, respectively. The 6.1% average cost of debt in the third quarter was down from the 7.7% level of the third quarter of 2009 due to the previously mentioned debt repurchases. At the end of the current quarter, approximately 86.2% of our outstanding debt had fixed interest rates, either by the terms of the debt or through hedging contracts, and the Companys debt-to-total capital ratio was 42.9%. Over time, the Company expects to return to its targeted range of 45% to 50%.
Net Income: For the third quarter of 2010, the Company reported net income of $36.5 million, or $1.03 per diluted share, compared to $22.1 million, or $0.61 per diluted share, reported in the year ago period. Excluding the current periods net loss on the repurchase of debt of $1.7 million ($0.05 per diluted share), net income would have been $38.2 million, or $1.08 per diluted share. This compares favorably to a third quarter of 2009 net income of $21.4 million, or $0.59 per diluted share, adjusted for a net gain of $0.7 million ($0.02 per diluted share) on the repurchase of debt.
Net Sales: When compared to the third quarter of 2009, North America net sales in the third quarter of 2010 increased 9.3% to $1,007.0 million from $921.5 million. Excluding favorable effects of foreign exchange rate changes and copper prices of $7.6 million and $13.1 million, respectively, North America net sales were $986.3 million in the third quarter of 2010, which represents an increase of $64.8 million, or approximately 7.0%, as compared to the year ago quarter. Excluding the sales related to the Companys decision to exit a customer contract, which contributed $29.8 million of sales in the third quarter of 2009, third quarter sales would have been $94.6 million favorable to the year ago quarter, representing organic growth of 10.6%.
Net Sales: When compared to the third quarter of 2009, Europe net sales increased 12.4% to $247.2 million in the third quarter of 2010, including $2.5 million due to higher copper prices. Unfavorable foreign exchange rates decreased net sales by $14.9 million in the third quarter of 2010. Excluding copper price effects and the unfavorable effects of foreign exchange rate changes, Europe net sales were $259.6 million in the third quarter of 2010, which represents an organic increase of $39.8 million, or approximately 18.0%, over the third quarter of 2009. Excluding the sales related to the Companys decision to exit a customer contract which contributed $0.9 million of sales in the third quarter of 2009, third quarter sales would have been $40.7 million favorable to the prior year quarter, representing organic growth of 18.5%. This growth is driven by higher sales in the OEM Supply end market due to the increased manufacturing production in most vertical markets, together with solid growth in the Enterprise Cabling and Security end market.
Operating Expenses: Excluding the goodwill impairment of $100.0 million from the prior year, the Company reported a year-on-year increase in operating expenses of 3.1% from $701.4 million in the year ago period to $722.8 million in the nine months ended October 1, 2010. The prior year results also include a severance charge of $5.7 million. Excluding the severance charge and $7.4 million of unfavorable foreign currency effects in the first nine months of 2010, operating expenses increased by 2.8% to $19.7 million as compared to a 7.2% increase in organic sales (excluding the terminated customer contract). Operating expenses in the first nine months of 2010 reflect higher variable compensation related costs and variable costs associated with the increase in organic sales. However, these increases have been partially offset by the cost reduction initiatives the Company implemented last year.
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